The Land Law were amended several times (in 1998, 2001 and 2003), but the changes introduced have been far from fundamental

Since 2008, the National Assembly has considered it an urgent task to amend the Land Law. Unfortunately, this endeavor only started in 2011, when the efficacy with which land regulations were enacted was reviewed. It is therefore unlikely for amendments proposed under this effort to be enacted by 2013, when 20-year land allocation deals under the Land Law 1993 expire.

It is important to note that the changes introduced thus far have been far from fundamental and, as a result, have failed to phase out disputes and corruption cases pertaining to land. The view of land as the people’s asset has proved problematic.

Impacts of 1992 Constitution

The Constitution promulgated in 1992 has affirmed the Government’s willingness to allocate land to individuals and organizations on a long-term basis whereas its counterpart in 1980 only allowed those currently having access to a land plot to continue enjoying land use rights. Second, the 1992 Constitution allows individuals and organizations to transfer land use rights while the 1980 Constitution did not mention this right. These differences have paved the way for shared ownership of land.

The Constitution in 1992 has enhanced the power of those given land use rights. However, it still holds that the Government will continue to manage land in accordance with existing laws, as well as its master plans. This provision marks an important shift in the role of the State in land management, with the Government lessening its intervention in how land is used.

The Land Law in 1993 is noteworthy in two aspects. First, lawmakers have adopted a broad definition of land use rights, which includes not only the utilization of land but also the transfer, lease and inheritance of this asset, to name just a few, and is therefore consistent with the traditional interpretation of this concept. Second, land use fees are imposed, giving rise to the buyer-seller relationship regarding this asset. Such fees are actually the money used to buy land use rights from the Government (this is obvious when they are set at market levels). There has been a framework for the sale and ownership of land use rights (a convoluted way of saying “land ownership”). However, due to the problems pinpointed above, the market principles underpinning these amendments have not been fully translated into reality.

Legal basis for shared ownership a crucial step

Over the past decade, Vietnamese policymakers have seen their view of economic relationships change drastically. The problem is the Government’s view of land use has failed to keep pace with such a profound shift.Throughout Vietnam’s history, ownership has arisen from investment, be it in the form of labor or capital. The Constitution in 1980 ran counter to this trend and aimed to obliterate the private sector in favor of nationalization. If Vietnam can effectively handle this disparity, everyone, except crooked officials, will benefit. After all, the view of land as the people’s asset does not translate into anything truly useful or beneficial in practice.

More than private ownership

Shared ownership can arise and become sustainable only when public, private and collective ownership co-exists (a condition frequently observed in human history). The view of land as the people’s asset is scarcely adopted in developed countries.

Shared ownership helps to reduce red tape substantially as the authorities will no longer need to pour resources into such tasks as determining land value, which will fall under the domain of market players instead. Of course, shared ownership will continue to allow the State to take or purchase land and other assets for projects of national importance — so long as transparency is maintained. This is precisely what has happened in many prosperous countries.

Moreover, the introduction of shared ownership is unlikely to deepen the rich-poor gap. Reality shows that those with access to vast areas of land tend to have great financial capabilities and capacity for success in agriculture. They will be able to use land efficaciously, create more jobs and help land sellers earn more.

In a market economy, shared ownership of land assures people that they can enjoy long-term land use rights and are protected against crooked officials. Disputes will fall and the populace can make better use of land, which now comes with lower production costs. The enforcement of several land-related rights, such as transfer and inheritance, will be much more effective, too.